Bills: Treasury Laws Amendment (2019 Tax Integrity and Other Measures No. 1) Bill 2019 - Second Reading

16 October 2019

Senator Patrick: 

Centre Alliance supports the intent of the bill and proposes a number of improvements to the Treasury Laws Amendment (2019 Tax Integrity and Other Measures No. 1) Bill 2019. Importantly, we are pleased to see the government has addressed recommendation No. 1 made during the recent Senate Economics Legislation Committee inquiry into the bill. The committee recommended that Treasury and the ATO address the unintended consequences for property owners where their property is unusable for reasons outside their control. The government amendment will provide small relief for those owners of apartments in the Opal and Mascot buildings as they will be able to make tax offsets on their mortgage payments and expenses through negative gearing while they patiently wait for the state government to remedy the situation.

However, the government has failed to take on board the committee's second recommendation by failing to address the concerns raised by the Inspector-General of Taxation. During the committee inquiry, it became apparent that the bill lacked consideration of how it will operate in the real world and was deficient in reasonable checks and balances. As foreshadowed, due to the significant possible impact of schedule 5, Centre Alliance has proposed amendments that will address the Inspector-General of Taxation's concerns now rather than at some time in the future. The amendments proposed to schedule 5 reflect the intent and spirit of the recommendations of the Inspector-General of Taxation. We have a situation where the committee, during its inquiry, found that Treasury had not really consulted with the Inspector-General of Taxation during the development of this legislation.

The consultation was very limited, and that's problematic in terms of process. The government should sit up and listen to the recommendations of the committee, which basically say that the government needs to go back and talk to the IGT and address their concerns. We're not talking about some lobby group that has concerns; we're talking about the Inspector-General of Taxation, the watchdog that sits over the Taxation Office that has to deal with the problems that are created by some of the decisions of the tax office. We need to put protections in place that make sure people are not put in positions of great disadvantage. In the case of schedule 5, you can have the situation where a credit agency is notified of a tax debt that may be erroneous for some reason, and will stay on the record, albeit transitorily, and affect that business's reputation and could have severe consequences. It could immediately stop any attempts to deal with any financial issues that they may have. It could be quite harmful. The point is, Treasury simply didn't consult with the Inspector-General of Taxation.

The question was asked during the committee: what happens if this legislation passes unamended? The response was, 'Well, without resources, we're in a bit of trouble.' So the government, by not following the recommendations of the committee, or in fact by not going back to the IGT, is not looking at what the IGT—once again, the IGT is the protector of small businesses—has said about the tax office and when it does something that's not quite right. The IGT has stepped in and said, 'This is how you make this fairer,' but it has gone unrecognised by the government. So, Centre Alliance will be moving amendments and, just to make it very clear to everyone, those amendments are simply reflecting what the IGT recommended.

By creating safeguards, the amendments will impose protections for taxpayers who may be at risk of having their taxation debts disclosed to a credit-reporting bureau. They will ensure that, before the ATO authorise the disclosure of a taxpayer's taxation debts to credit-reporting bureaus, they must consult with the Inspector-General of Taxation and they must take into consideration what the IGT has to say. They must notify taxpayers' accountants or bookkeepers. Right now you have a situation where a notification might go to the taxpayer—they're not experts in tax; they normally rely on a tax agent. There were concerns expressed about disclosing the tax affairs of a client, of a business, but in actual fact the accountants for a business will understand the taxation situation of a company better than anyone. So that's a concern that is not warranted, and I would encourage the chamber to support our amendments to make that change.

The amendment also provides a clearer mechanism of how a notice is provided to the taxpayer. It increases the time the ATO must provide a taxpayer with before a decision on a notice can be made, and it requires the consultation on and consideration of any issues raised by the Inspector-General of Taxation before making a declaration to authorise the disclosure of a taxpayer's tax debt information to a credit-reporting bureau. These amendments are sensible amendments. They're amendments that were proposed by the Inspector-General of Taxation, and I would urge the Senate to support those amendments when we move them. Thank you.

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